Abstract:The aim of this study is to analyze whether the receipt of public funding for innovation determines for present and future a firm's choice of R&D strategy. We consider three R&D strategies: make R&D in-house, buy R&D and, combined make-buy R&D. The analysis uses a sample of 457 large firms for the period 1992-2005, taken from the Spanish Survey of Business Strategies. Estimation of a multinomial logit model with random effects shows that the positive effect of public funding varies according to the source of the aid, so, while State and Regional funds have a long term effect, other financial aid (such as EU grants) has only short-term effect.The second relevant finding is that the source of the aid also influences whether the firm selects the make, buy or make-buy strategies.